This blog is about budgets - not the George Osborne efforts - but company ones.
From my degree / CIMA etc, I remember studying all about how budgets were to bring goal congruence between all the different stakeholders - aligning the behaviour of the managers and the board etc.
Like all theories - all well and good.
I am currently working in departmental budget reporting, which is presenting some challenges:
1) The annual budget for 2015 is created at a company, rather than department level.
2) This same budget is created on a spreadsheet workbook with similar, but not identical, headings to the accounting software. There are fewer categories in the master budget than the nominal ledger.
3) The nominal ledger is grouped in to departments - but many of these groupings are a bit duff. One of the unfortunate features of my software (Sage 200) is that I cannot change these departments once created.
Some of this I have solved by the following:
1) Create a lookup table in Excel to pull out the Sage data.
2) Append a 'new' department name to the side of each record.
3) Report on this new data by means of a pivot table.
So I think that is the transactional work sorted.
The big issue I have with budgets is actually how little of our short run cost is actually variable anyway. Direct materials vary, of course, with sales - as do things like carriage costs.
Pretty much every other line in the ledger is broadly comparative month to month.
So - this is given to the department manager - who then in effect says 'meh' and you wonder why you bother.
Feel free to share experiences of where budgets have actually worked as they are apparently meant to - and brought about changes. Or, alternatively, feel free to take a completely different view - possibly looking towards some kind of rolling forecasts etc.